Analysis: Icesave: The President’s Dilemma Skip to content

Analysis: Icesave: The President’s Dilemma

President Ólafur Ragnar Grímsson did not sign the Icesave-bill into law at a meeting with the cabinet yesterday. This was highly unusual, since usually the President would use the occasion to sign all laws ratified by Althingi, Iceland’s Parliament. In his televised address on New Year’s Day the President reiterated that:”Democracy is the way Icelanders chose. In the beginning it was narrowly defined, but later broader. Now there is growing support for direct democracy, so that the people themselves govern to a greater extent. One should keep in mind that the will of the people is the foundation that the democratic rule is based upon. … The President of the young republic [founded in 1944] is given the power to insure that the nation has that right, although conditions and consequences have to be taken into account.”

Many take this as an indication that the President will refuse to sign. He is in a very difficult spot. When he signed a previous bill on Icesave, passed by Althingi in late August 2009 he indicated that the reason was that many preconditions had been set in that bill. Those conditions have been watered out on the insistence of the British and Dutch governments. So if the President wants to be consistent he should not sign the bill.

The president has only refused to sign a bill into law once. In 2004 Grímsson became the first president in Iceland’s history to exercise the president’s veto right when he refused to confirm a government bill that was intended to prevent concentration of ownership in the media sector. His move was harshly criticized by the Independence Party. The veto at that time was exercised, according to the President because “a rift had been formed between the nation and Althingi.” Opinion polls indicate that a great majority of the nation is against the Icesave-legislation.

The 2004 media law was withdrawn in the end. Many see the fact that all daily newspapers in Iceland were owned by the country’s richest men contributed to the collapse of the Icelandic economy, in absence of a critical voice.

Grímsson was a member of Althingi for about ten years, first in 1978 to 1983 and then in 1991 to 1996. He has belonged to at least three political parties, the Progressive party, the Coalition of Liberals and Lefties and the People’s Alliance, of which he was chairman. He was always a very controversial politician. He was highly anti-business. In 1996 he was elected president with about 42% of the vote in a four way race. In 2000 he ran unopposed but after his refusal to sign the media bill in 2004 he got only about 42% of the electorate to come out to vote for him when he was opposed by two minor candidates. Many chose to stay at home or turn in an empty ballot. When his predecessor, Vigdís FInnbogadóttir was in a similar situation in 1988 she got about 67% of the people voting for her.

After .Grímsson became president he changed his attitude to business and was very close to most of the riches men in the country, including Björgólfur Gudmundsson and his son Björgólfur Thor Björgólfsson, owners of Landsbanki (the Icesave bank) and West Ham United soccer club in England of which the older was elected President for life. Other close friends of the president include Jóhannes Jónsson and his son Jón Ásgeir Jóhannesson of Baugur Group.

At year end Iceland television airs a one hour spoof about what happened during the year. This year’s show began with a party at Bessastadir, the President’s official residence. All of the leading businessmen were seen at the party badly hung over. This theme recurred during the show, indicating that the President was seen by the nation as partying hard with the richest men in Iceland and other countries. (It should be stressed that the Icelandic President does not drink alcohol). In the show the President was joking with his rich friends, who were helping him in his address to the nation. At the end of the spoof the guests were taken away by the police, but the President remained in his house.

Two days ago about 35 thousand people have signed a petition urging the President not to sign the bill. At the time of writing in the afternoon of January 1 the number has gone up to almost 55 thousand. This means that the President is making it more difficult to sign by postponing his signature.

The President’s dilemma is as follows: If he signs the bill he will get the scorn of many. Opinion polls indicate that about 70% of the people oppose the bill. His previous actions in 2004 and 2009 will look ridiculous. On the other hand, by using his power not to sign he betrays his former colleagues. Eight out of twelve cabinet ministers are said to have been members of the People’s Alliance at one time (the party no longer exists). A power crisis might follow.

So no matter what happens it seems likely that President Grímsson has dug himself into a very deep hole that he will have a hard time getting out of.

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